4362ch3 sp10

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Chap 3 – Plugging into the Information Age

Objectives1. To explore the services economy and the

information age2. To show how services marketers can use

information technology as an employee tool for improving customer service and increasing productivity

3. To demonstrate how services marketers can enlist information technology to empower their customers

4. To explain how information technology can help bridge the physical distance between organization and customer and enable the interactive experience


Objectives (cont’d)

5. To illustrate the various ways in which services marketers can employ information technology to learn more about their customers and respond to them more effectively

6. To caution service organizations regarding the negative impact of technology

7. To convey the many challenges of using technology to manage customer interfaces in service industries


Services and the Information Age


Services and theInformation Age (cont’d)

• Lags– Many services are very people-intensive– Many services are hard to standardize– Many services are difficult to infuse with technology

• Lulls– Digesting new technology takes time (time sink)– Many changes are more qualitative than quantitative

• Leaps– Organizational transformations are possible– Nurturing of intellectual resources



• Technology in the Core Service• Technology as a Supplementary Service

Support Tool


Empowering EmployeesThrough Technology

• Technology Devices• Networking


Empowering the Customer

• Self-service machines, such as vending or automated teller machines (ATMs)

• Computerized service delivery systems• Intelligent agents• Service robots


Enabling the Interactive Experience


Enabling theInteractive Experience (cont’d)


Capturing Customer Information

• Advances in information technology have allowed organizations to collect large quantities of information about customers and to create and deliver customer services hitherto unimaginable.

• It has also become possible to move from mass marketing to targeting individuals.


Capturing CustomerInformation (cont’d)

• Customer databases require several steps:– Group customers into categories: current

customers, prospective customers, and lapsed customers

– Data on the recency and frequency of each customer's purchases

– Data on each customer's purchases over a period of about twelve months

– Data on relevant customer information that will improve the company's ability to serve customer needs (preferred sizes, birthdays, credit card numbers, etc.)


Capturing CustomerInformation (cont’d)

• Uses– Tracking customers' purchase patterns– Make purchase patterns easily accessible to the

frontline service provider• Cautions

– Services marketers need to be very cautious about privacy issues as they create and use customer databases


Coping with Negative Impactsof Services Technology

• Technology will continue to play a critical role in service organizations’ competitive position.

• Service organizations often find that they have implemented new technology systems only to discover they have made no provisions for the absence of the technology during a power failure.

• Services employment levels may fall in absolute terms as technology replaces workers or reduces the need for workers.


Challenges of Using Technologyto Manage Customer Interfaces

• Technological weak links in customer interfaces• Steps for improving the technology of customer

interfaces


Weak Links in Customer Interfaces

• Automated Idiocy

– The rush to automate service functions often leads to systems that automatically do stupid things.

• Time Sink – New services technology can be a “time sink” that

steals time from the technology user. • Law of the Hammer

– Based on the idea that a small child with a hammer sees everything as a nail. Technology can be used too much!

– An obsession with too many “bells and whistles”


Weak Links inCustomer Interfaces (cont’d)

• Technology Lock– Technological designs persist long after their

functional value is gone. • Last Inch

– Many customer interface problems occur at the point of contact between the customer and the technology.

• Hi-Tech Versus Hi-Touch– Customers face a confusing set of automated

instructions when they really need to speak to a human being and not to a machine. Phone mail can become “phone jail.”


Steps for Improving theTechnology of Customer Interfaces

• Provide marketer input into the technology of customer interface design– The marketer can help prevent design problems

• Stay customer-focused, not machine-focused – Essential to successful customer interface design

• Make services technology invisible to the customer– Place technology in the background

• Insist on design for flexibility – Insist on designs that offer employees and customers

maximum flexibility

4362ch3 sp10

Business